The destabilization of Detroit
A few weeks ago, I traveled to Chicago, President Barack Obama’s hometown, at the invitation of the Illinois Policy Institute. I took part in a panel discussion about Detroit’s path to bankruptcy and whether the Windy City was far behind.
Since I was in Detroit during the city’s heyday and witnessed its demise firsthand, I was selected to lead off the discussion.
I recalled that when Detroit was the 4th largest city in America – behind Chicago — it ranked among the highest in employment and percentage of homeownership. When automotive-related manufacturing jobs were plentiful, the Motor City was considered one of the wealthiest big cities. It devolved from one of the most livable cities in America to one of the worse.
There were three major incidents that led to Detroit’s downward spiral. The first was the 1967 riots when Detroit still had a predominantly white population.
When groups of Detroiters took to the streets to loot and burn businesses, militants seized the opportunity to denounce government indifference to “black misery” and to air their pet grievance that the police department was a terrorizing, occupying force. The insurrection scared the heebie-jeebies out of white residents.
The second major shock wave came in the early 1970s when the federal court ordered a program to bus blacks kids in the urban core to the outskirts of the city where the majority of whites had fled, and vice versa. The reality was that there was no constituency – black or white – for busing kids out of their neighborhoods. Forced busing proved to be a failed social experiment that accelerated white flight to something resembling a stampede.
Civic, social and professional institutions lost their best and most loyal patrons. The bleeding of manufacturing jobs turned into a hemorrhage as businesses followed their customers.
In 1974, Coleman Young took office as Detroit’s first black mayor, the first of a major city in the civil rights era. Young was a tortured soul who was damaged by racism in his youth and incapable of rising above his victimization. His enduring pain, including wholesale rejection of rescue efforts proposed by the corporate community, colored his management of the city.
One of his worse decisions was to brow-beat the Legislature into giving him the authority to place before voters a 3-percent resident and a 1.5 percent commuter tax, the highest in Michigan. This levy was heaped on a shrinking population that had diminishing per capita income and who also paid the highest property taxes and a “utility” tax. State revenue sharing became Detroit’s major revenue stream. Dwindling city services propelled the black middle-class to begin its out-migration. And the mortgaging of the city’s future would commence for years on end.
The result was a concentration of poverty that reduced opportunities for academic success. Public school enrollment sank from a high of 298,000 in 1966 to less than 50,000 today. High school dropouts, low achieving and undisciplined students weakened the connection between education and work.
Young –and mayors that followed him –failed to encourage a hospitable business environment. Instead they solicited, received and relied on an alphabet soup of urban revitalization, anti-poverty programs, government grants and subsidies. This largesse was the equivalent of artificial life support. But rather than using the taxpayer funded urban Marshal Plan “windfalls” to right size government, politicians used them to continue the addiction to spend.
For the last 40+ years, Detroiters believed that political power would provide the keys to economic empowerment. They elected to office people who had never successfully managed a multi-million dollar government – or anything else for that matter — and who lacked any real sense of what constitutes sound public policy.
There are, of course, social and fiscal similarities, as well as political differences between Detroit and Chicago. I was not in a position to assess them.
This much I know: If Detroit has a more promising future it will depend less on what corrective measures the emergency manager makes, and more on the grooming of a more enlightened, informed electorate.